Thailand

Thailand’s economy has shown strong performance through mid-2003, with full-year growth officially projected between 5.8% and 6.2%. With this solid performance, Thailand is well free of the economic crisis that hit the country and the region in 1997 and appears on course for further growth. Even the SARS crisis that struck much of the region in early 2003 had little impact on Thailand, due to the government’s swift reaction to halt the spread of the disease in the country.

Economic expansion in early 2003 has been the result of both strong consumer activity and a rise in exports. Trade between Thailand and its Asian neighbors, in particular its emerging trade links with China, has been growing faster than with its traditional partners in the U.S., Europe and Japan. Macro-economic indicators - reserves, inflation, market interest rates, and exchange rate - remain largely stable.

Thailand maintains a reputation as a good place to invest and do business. The country has many strengths as an investment destination, such as its location in the center of Southeast Asia, relatively low-cost and skilled workforce, tolerance towards foreigners, relatively open markets and, importantly, a stable political climate.

The U.S. is the second largest investor in Thailand, after Japan, with cumulative foreign direct investment (FDI) estimated near $20 billion, based on a recent survey conducted by the American Chamber of Commerce in Thailand. Among ASEAN countries, Thailand was the leading destination for U.S. FDI.

U.S. firms who choose to invest in Thailand can take advantage of incentives offered by the Thai Board of Investment. American investors also can take advantage of the U.S.-Thai Treaty of Amity and Economic Relations (AER), which affords U.S. majority-owned entities to set up business on the same basis as Thais, exempting them from most of the restrictions on foreign investment imposed by the Alien Business Act. U.S. firms should be aware that investment matters would be discussed during any Free Trade Agreement negotiations with Thailand. American manufactured goods and services are well received in Thailand and the trading relationship between the two countries is brisk. Bilateral trade totals nearly $20 billion, with U.S. exports to Thailand in 2002 at $4.9 billion (down 19% from 2001) and Thai exports to the U.S. last year totaling 14.8 billion (a 0.5% decline).

In 2004, Arizona exported over $440 million worth of products to Thailand making it Arizona’s ninth largest export market.

Best prospects (by sector) for US exports:

Franchising
Computer Services and Peripherals
Computer Software
Airport and Ground Support Equipment
Education and Training Services
Electrical Power Equipment
Telecommunications Equipment
Medical Equipment
Laboratory and Scientific Equipment
Pet Foods and Supplies
Food Processing and Packaging Equipment
Security and Safety Equipment
Automotive Parts and Services
Food Supplements
Cosmetics and Toiletries

Source: US Foreign Commercial Service

A full copy of the Country Commercial Guide to Thailand can be obtained through the Market Research resource at: http://www.export.gov